Good morning, everyone, and welcome to a new trading week. The big news, of course, is that a breakthrough in the Senate has greatly increased the chances that the longest government shutdown in history is going to end pretty soon. Assets are up across the board, even though a deal to re-open the government would only be good through January, at which time we’d all go through this circus again. At least Thanksgiving isn’t going to be ruined.
This huge celebration going on right now is a bit silly. It’s like if your wife threatened you with divorce, and you went through a month and a half of discord, lawyers being hired, threats – – and then she called it off for a couple of months with a promise to resume in the new year. Is that something you’d see as a victory? I mean, yeah, it’s a reprieve, but c’mon – – absolutely nothing has changed.
Having lightened up considerably on Friday, I’m champing at the bit to get aggressive again, because the sea-change I’ve been writing about is still very much intact. All this mega-rally has done is to offer up great prices to short again, as with the /RTY:
Seriously, look at the Russell futures back to the April bottom. This is the very essence of a broken uptrend.
Does the /NQ seriously look like a good thing to buy now?
Or how about the /ES? Only to the clinically insane. I have removed ALL my stop-loss orders and will be re-examining every position I have to provide it an appropriate stop or, if necessary, to cover for now. On the whole, I’m holding fast.
Of the five portfolios I manage, I went “all in” precious metals with two of them. Gold in particular is doing nicely right now (up over 2%, shown below) and palladium is doing just as well. My concern remains whether these can “break free” of the grip of equity movement, since I obviously would like them to stay strong even if equities re-weaken.
If indeed the government re-opens, we’re going to face a tidal wave of data between now and the end of the year, since the data-makers in D.C. have a huge amount of statistical work to catch up on.
Setting that aside, I’ll leave you with a photo I took yesterday morning when I was strolling up in the mountains with Duke, which is the kind of peaceful image I think we can use while getting ready for a crazy day.
